UBS upgraded Mphasis Limited to Buy from Neutral and raised its target price to Rs 2,980 from Rs 2,440, as part of its selective stance favouring Tier-2 Indian IT companies while AI revenues remain small.

Mphasis Limited delivered its fifth consecutive quarter of more than $400 million in total contract value in Q1FY27, a resilient deal momentum trend noted by Anand Rathi Shares and Stock Brokers amid otherwise muted midcap IT growth.

Mphasis Limited was downgraded to Underperform by CLSA, which cited structural concerns, long gestation time and limited potential upside despite mixed Q1 earnings and expectations that AI volumes could supersede deflation by FY30.

Mphasis Limited reported 2.1% QoQ CC revenue growth in Q1FY27, above the sector median of 1.2%, but Motilal Oswal Financial Services noted its TCV declined about 39% YoY, reflecting a divergent deal landscape between Tier-1 and Tier-2 players.

CLSA downgraded Mphasis Limited to Underperform from Hold on structural concerns, setting a target price of Rs 2,113, as part of its cautious view on AI deflation and macro uncertainty.